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Is Trump Getting Rid Of Income Tax
Apr 15, 2025
For many families, tax season can bring a lot of stress and anxiety. Will you get a refund this year? How big will it be? Will you owe taxes? What happens if your income changes? If the Trump administration gets its way, answers to these questions could change drastically as it implements its plans for Trump’s tariffs 2025. While understanding the new potential rules is essential, many people are asking a more fundamental question: Is Trump getting rid of income tax? This guide will help readers understand what’s going on as the Trump administration rolls out its new tax plan and whether or not it will affect income tax.
Check out GoMoons' AI-powered economic calendar to understand the upcoming financial changes. This tool helps readers track specific events and policies that could impact their finances, helping them prepare for upcoming changes.
Table of Contents
What Trump’s 2025 Tax Agenda Looks Like
President Trump’s 2025 economic strategy dramatically shifts from traditional fiscal approaches. Instead of relying primarily on income taxes to fund government operations, the administration aggressively turns to import tariffs as a significant revenue source. This shift is part of a broader philosophy: reduce the tax burden on American individuals and businesses, while increasing costs on imports.
On April 2, 2025, Trump signed an executive order implementing a universal 10% tariff on all U.S. imports. An additional set of tariffs, 25% to 60%, was applied to 57 targeted countries, including China, Mexico, Germany, and India. The White House projects this tariff policy will generate $5.2 trillion in revenue over the next decade. The messaging is clear: If tariffs can generate enough income, Trump wants to reduce and potentially eliminate income tax for Americans.
Project 2025 and the Push to Restructure the Tax Code
A significant influence on Trump’s economic direction is Project 2025, a policy framework developed by conservative think tanks like The Heritage Foundation. This initiative outlines aggressive reforms, including: eliminating the current progressive income tax system, replacing it with a flat tax (a single tax rate for everyone regardless of income) or implementing a consumption-based tax, such as a national sales tax (FairTax model) and reducing or dismantling the IRS in favor of simplified digital tax collection. These proposed reforms align with Trump’s long-standing criticism of the complexity and overreach of the federal tax system.
The Legacy of the Tax Cuts and Jobs Act (TCJA)
Trump also calls for the permanent extension of the 2017 Tax Cuts and Jobs Act, which lowered tax rates for individuals and corporations, introduced standard deduction increases, and created business incentives. The act was initially set to expire for individuals in 2025. The extension is projected to decrease federal tax revenue by $4.5 trillion, making alternative funding (like tariffs) even more critical if the government wants to avoid increasing the deficit further.
A Radical but Strategically Timed Proposal
Trump’s call to reduce or eliminate income tax isn’t just economic, it’s political timing. With inflation concerns, wage stagnation, and rising public frustration over taxation, shifting the financial burden away from workers to foreign entities (via tariffs) plays well with his voter base. It’s marketed as a patriotic move: “Let China pay for your taxes.” But critics warn this model has long-term risks: higher consumer prices, potential trade retaliation, and increased pressure on lower-income households if alternative tax models aren't progressive.
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Is Trump Eliminating Income Tax? What We Know So Far
Did Trump Say He’d Eliminate Income Tax?
Donald Trump and his policy allies particularly those aligned with Project 202 have floated bold tax reform ideas, including: Abolishing the federal income tax altogether, Replacing it with a flat tax or national sales (consumption) tax, Shrinking or even dismantling the IRS to reduce federal oversight on personal income However, Trump has not signed any formal legislation to eliminate income tax yet. His April 2025 economic executive orders focused primarily on tariffs, while tax reforms are being pursued via budget reconciliation in Congress. So, is income tax going away tomorrow? No, but serious groundwork is being laid.
What’s Being Proposed Behind the Scenes?
Budget blueprints from Trump’s allies in the House aim to restructure the tax system entirely by 2026 Proposals like the FairTax Act are gaining traction this would eliminate income, payroll, and estate taxes and replace them with a 23% national consumption tax These reforms are tied to Project 2025, a policy document that includes:
A flat income tax or complete elimination of income tax in favor of taxing only what people spend. For entrepreneurs and side hustlers using GoMoon to track multiple revenue streams, these changes would completely shift how income and deductions are treated. No more worrying about deducting expenses or tracking quarterly taxes; only sales and purchases may matter.
Is It Politically Possible?
Trump's tax overhaul is controversial, and here’s why it’s not a done deal: Congressional approval is required to repeal federal income tax Democrats and moderate Republicans are unlikely to support complete elimination Replacing income tax means finding new, stable revenue sources like tariffs or consumption taxes, which may hit lower-income Americans harder Still, Trump’s growing control over the GOP and current economic urgency mean these ideas could gain momentum especially if pitched as “pro-growth” and “anti-IRS.” Staying updated is crucial for platform users like GoMoon creators who earn across multiple projects. Depending on how the new model is structured, these changes could simplify or complicate your finances.
So, Is Trump Getting Rid of Income Tax?
Here’s a balanced summary: No official law has passed yet Yes, strong intentions exist to reshape or remove the income tax model Any change would likely happen gradually, not overnight Trump’s administration is building a case for it through Project 2025 and public discourse For everyday earners, business owners, and digital professionals including GoMoon users managing revenue in crypto, USD, or even stablecoins these discussions aren’t just theoretical.
They Could Determine
How you save and spend, how platforms like GoMoon calculate cash flow, whether your income is taxed, or just your purchases. GoMoon transforms economic calendar data with AI-powered insights for smarter trading decisions. Our platform analyzes global events and rates their market impact on a scale of 1-10, helping you understand how they'll affect various assets. Live economic event streaming, custom notifications, and historical event replay with TradingView charts. What sets us apart is our comprehensive approach to event analysis.
Whether you're tracking the impact of major economic announcements or comparing forecast data with actual outcomes, GoMoon provides clear, actionable insights. You can personalize your calendar, stream live meetings directly on the platform, and analyze historical events like the dot-com bubble or COVID-19 crash to understand market reactions better. GoMoon clarifies the complex world of economic events for traders seeking data-driven decisions. Get started for free to get AI-powered economic insights today.
How Traders Can Strategically Navigate Trump’s Tax and Tariff Changes
The Shift from Income to Consumption-Based Taxation: What You Need to Know
Trump’s plan to eliminate and replace income taxes with consumption-based taxes (like national sales taxes) would significantly affect traders and self-employed professionals like GoMoon users. In this scenario, earning more would no longer be taxed directly, which is a massive upside for traders and self-employed professionals. However, spending would be taxed, which affects lifestyle decisions and large purchases.
For GoMoon users managing diverse income from freelancing, trading, or eCommerce, this tax shift simplifies earnings tracking but introduces a new layer of spend-based forecasting. You’ll want to tag and label expenses meticulously, use GoMoon's income vs. expense graphs to model future tax exposure, and plan more significant buys (like tech gear or cars) before consumption tax kicks in fully.
Reevaluate Asset Allocation and Entry/Exit Points
Trump’s aggressive tariff policies, including a blanket 10% tariff on all imports, targeted hikes on goods from 57 nations, and volatility from retaliatory tariffs, have caused ripple effects in both forex and crypto markets. Traders must rethink strategies. Forex traders should focus on safe-haven currencies (CHF, JPY) during uncertainty, while crypto traders should hedge against volatility by tracking sentiment tied to tariff announcements.
Watch for “relief rallies” after any temporary tariff pauses, especially ones excluding key economies like China and Canada. GoMoon users can use the platform’s portfolio-tracking tools to set alerts tied to economic news events, view historical performance across asset classes during previous trade war cycles, and backtest strategies to simulate gains/losses under projected tax burdens.
Hedge With Smart Trading Instruments
To reduce downside risks during uncertain fiscal shifts, options and futures become valuable tools. Gold and inflation-resistant ETFs can provide stability. Crypto traders may diversify into layer-1 altcoins or stablecoin liquidity pools. GoMoon’s asset-linked trade journal lets you track the performance of each position against major economic events (like tariff deadlines) and log your rationale for entries and exits so you can refine strategies over time. Use custom tags like “#TrumpTariff” or “#TaxShift” to organize trades for future analysis.
Diversify Revenue Streams to Stay Flexible
The combo of tax reform and tariffs means markets will remain volatile and polarized for the foreseeable future. Traders should diversify across forex, crypto, commodities, and even side hustles, and consider international exposure to countries unaffected by U.S. tariffs. Stay on top of policy updates, as small announcements can trigger significant price moves. For GoMoon users, this is a perfect time to create multiple income pipelines inside the platform (trading + affiliate + freelance, etc.) and monitor tax categories by income type. So if new rules roll out, you’re already prepared to export monthly summaries to share with tax advisors for up-to-date financial planning.
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Use Our AI-powered Economic Calendar Tool for Free Today
GoMoon transforms economic calendar data with AI-powered insights for smarter trading decisions. Our platform analyzes global events and rates their market impact on a scale of 1-10, helping you understand how they'll affect various assets. We've packed everything traders need: Live economic event streaming, custom notifications, and historical event replay with TradingView charts. What sets us apart is our comprehensive approach to event analysis.
Whether you're tracking the impact of major economic announcements or comparing forecast data with actual outcomes, GoMoon provides clear, actionable insights. You can personalize your calendar, stream live meetings directly on the platform, and analyze historical events like the dot-com bubble or COVID-19 crash to better understand market reactions. GoMoon clarifies the complex world of economic events for traders seeking data-driven decisions. Get started for free to get AI-powered economic insights today.
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